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Most Americans get health insurance through their employer, Medicare, or Medicaid. However, individual health insurance is another way to get coverage if you’re not eligible for any of these plans.

Individual plans provide similar benefits to most employer plans. Depending on your income, individuals and families may pay even less for individual health coverage than one through an employer.

Individual health insurance is available through the Affordable Care Act (ACA) federal and state exchanges, as well as directly from insurance companies. If you are eligible for an ACA plan, you can’t be denied coverage. Depending on your income, you may also be eligible for ACA plan subsidies.

KEY TAKEAWAYS
  • You can buy individual or family coverage from the Affordable Care Act marketplace or directly from a health insurance company.
  • ACA plans qualify for government subsidies that can reduce the cost of health insurance. No other plans qualify for those subsidies.
  • Individual health plans offer comprehensive coverage, including emergency room and doctor visits, maternity care, prescription drug benefits and mental health care.
  • You can enroll in an ACA plan during open enrollment or during a special enrollment period if you face a qualifying event.

How to get individual health insurance?

Healthcare.gov has comparison tools, cost calculators and educational resources to help you select the right plan for you and your family. The website can also help you estimate any premium subsidies that you may be eligible for. Healthcare.gov as well as the state websites also have customer service representatives if you need some help with the process.

If you live in one of the 17 states with its own exchange you would use the state website to enroll. Those states include:

  • California
  • Colorado
  • Connecticut
  • District of Columbia
  • Idaho
  • Kentucky
  • Maine
  • Maryland
  • Massachusetts
  • Minnesota
  • Nevada
  • New Jersey
  • New Mexico
  • New York
  • Pennsylvania
  • Rhode Island
  • Vermont
  • Washington

For any other state, use the federal government’s Healthcare.gov health insurance exchange to enroll.

Not all insurers sell plans through the government-run health insurance marketplace. You can find more individual and family options by shopping directly through health insurance companies that offer plans outside of the exchanges. If you decide to look outside of the exchanges, remember those plans are not eligible for subsidies.

Now, let’s take a look at when you can buy individual health insurance and the types of plans and other options.

How much does it cost to buy health insurance on your own?

Generally, the less you pay out of pocket for the deductible, copays and coinsurance, the more you spend on premiums. Platinum plans charge higher premiums than the other three plans, but have lower deductibles. Bronze, meanwhile, has the lowest premiums but the highest out-of-pocket cost.

When deciding on the level, consider the medical services you used over the past year and what you expect next year. Healthcare.gov as well as the individual state websites have calculators to help you.

According to KFF the Kaiser Family Foundation. the average premiums for bronze, silver and gold plans are:

PlanAverage Cost
Bronze$329
Silver$428
Gold$462

Bronze and Silver are the most popular plans -- 32% of insureds have Silver plans and 56%% have Bronze plans. Only 10% have Gold plans and 1% have Platinum plans.

What’s the cheapest health insurance?

The cheapest premiums in the ACA marketplace are Bronze plans. If you are eligible for subsidies, your premium cost for Silver and Bronze plans may be similar. Healthcare.gov and state websites have calculators to help you estimate your subsidies and total cost.

Non ACA compliant plans may be less expensive, but the benefits are limited. Be sure to compare them to the ACA plans before you make a decision.

When to buy an individual health plan?

You can purchase or make changes to individual health insurance during the open enrollment period. Open enrollment for most states is from Nov. 1 to Jan. 15. States with their own exchanges usually offer expanded open enrollment.

States with slightly different open enrollment periods include California, the District of Columbia, Idaho, Maryland, New Jersey and New York, and Rhode Island.

The only other time you can get individual health insurance coverage is if you have a qualifying event that launches a special enrollment period. These events may have caused you to lose your health insurance coverage. The special enrollment sign up period lasts 60 days.

Special enrollment qualifying events include:

  • Getting married
  • Having a baby, adopting a child or placing a child for adoption or foster care
  • Moving
  • Becoming a U.S. citizen
  • Leaving incarceration
  • Losing other health coverage due in the past 60 days to job loss, divorce, COBRA expiration or aging off a parent’s plan
  • Losing eligibility for Medicaid or the Children’s Health Insurance Program (CHIP)
  • Change in income or household status that affects eligibility for premium tax credits or cost-sharing subsidies
  • Gaining status as a member of an Indian tribe

The ACA marketplace’s open enrollment is usually from Nov. 1 to Jan. 15 in most states, but starting in 2022, low-income Americans will have more chances to get a marketplace plan.

People with income up to 150% of federal poverty level ($19,320 for a single person, $32,940 for a family of three) will be eligible for a special enrollment period each month. The Centers for Medicare and Medicaid Services estimates that about one-third of marketplace plan members will qualify.

When do I need individual health insurance?

If you aren’t eligible for employer-sponsored health insurance, Medicare, Medicaid, veteran’s benefits or any other government program, you should buy individual health insurance.

You can buy individual health insurance through the ACA marketplace, as well non-ACA policies through brokers and directly with insurance companies.

What do individual health plans cover?

ACA marketplace Individual health insurance plans offer comprehensive coverage. ACA marketplace plans have to offer coverage to you regardless of your health history. You qualify for individual health insurance even if you’re pregnant, or have a long-term condition like diabetes or a serious illness, such as cancer. ACA marketplace health plans can’t cap the amount of benefits you receive and limit out-of-pocket costs you have to pay in a year.

In addition, all ACA marketplace individual health plans must cover a standard set of 10 essential health benefits:

  • Outpatient care, including doctor’s visits
  • Emergency room visits
  • Hospitalizations
  • Pregnancy and maternity care
  • Mental health and substance abuse treatment
  • Prescription drugs
  • Services and devices for recovery after an injury or due to a disability or chronic condition
  • Lab tests
  • Preventive services, including health screenings, immunizations, and birth control. You pay nothing out of pocket for preventive care when you see health care providers in your plan’s network.
  • Pediatric services, including dental and vision care for kids.

Plans that are not ACA compliant are available directly from insurance companies. They’re generally less expensive, have limited benefits, and can decline to offer coverage based on your health history.

How to choose individual health plans?

There are different types of individual health plans. Plans in the ACA marketplace are divided into four metal tiers to make comparing them easier. The tiers are based on the percentage of medical costs the plans pay and the portion you pay out of pocket. Out-of-pocket costs include deductibles, copayments, and coinsurance.

PlanPlan PaysYou Pay
Bronze60% of healthcare costs40% of healthcare costs
Silver70% of healthcare costs30% of healthcare costs
Gold80% of healthcare costs20% of healthcare costs
Platinum90% of healthcare costs10% of healthcare costs

The percentages are estimates based on the amount of medical care an average person would use in a year. Platinum plans, which pay 90% of healthcare costs, are more expensive than Silver plans that pay 70% of healthcare costs. Not all providers accept every plan.

Individual health insurance subsidies

People who buy an individual health plan through the ACA exchanges may be eligible for subsidies that reduce the cost of premiums.

The ACA allows tax credits and subsidies. Only people with household income below 400% of the federal poverty level are eligible for subsidies.

The American Rescue Plan of 2021 increased subsidies as part of pandemic relief through 2022. The increased subsidy however is set to expire, unless congress acts to extend them. When you search for a plan through the ACA exchanges, the site provides cost estimates that include subsidies.

Reminder: People with an individual health plan outside of the exchanges aren’t eligible for subsidies.

Other options for people looking for health insurance

Individual health insurance is an option, but there are other ways beyond an employer plan for a person to get coverage:

  • Short-term plans -- These plans don’t offer the same benefits as a normal health insurance plan. Insurers aren’t required to provide comprehensive benefits. Most short-term health plans don’t cover maternity, prescription drugs and mental health. Instead, you pay for that care yourself. Short-term plans aren't meant as a long-term health insurance solution. You can only have them for one year and can request two extensions. These plans are low-cost, but they have limited benefits. Also, a handful of states don’t allow short-term plans, while others restrict them to shorter time frames.
  • Medicaid -- Medicaid is available to people who qualify. Thirty-nine states expanded Medicaid, which allows people who make up to 138% of the federal poverty level eligible for Medicaid. That level is $17,609 for a single person, $23,791 for a two-person family and $36,156 for a family of four. Medicaid plan costs depend on your income, but you’ll pay less for Medicaid than an employer or individual plan if you qualify. Medicaid offers comprehensive health insurance despite the lower costs.
  • Catastrophic health plans -- If you’re under 30 or meet income requirements, you could qualify for a catastrophic health plan. These plans offer lower premiums but come with much higher deductibles and out-of-pocket costs than standard health insurance plans. The idea behind catastrophic plans is to give people coverage to prevent financial ruin if they have emergency health care needs. Unlike short-term health plans, which don’t cover many services, catastrophic plans offer the same level of coverage as standard ACA plans.

What to consider when buying individual health insurance?

When shopping for an individual health insurance plan, you want to consider your health care needs and budget.

Here are some questions to consider:

How much flexibility do you want in your plan?

When choosing an individual health plan, you want to consider the type of benefit design. Health maintenance organization (HMO) plans are the most common plan design in the individual market.

HMOs include restricted provider networks. HMO members can only see doctors and get care from facilities in those networks. Also, you need a primary care provider referral to see a specialist.

Exclusive provider organization (EPO) plans don’t allow you to get care outside of the network, but you also don’t need a referral to see a specialist.

Preferred provider organization (PPO) plans are more flexible. You can see doctors both in your network and outside the network. You don’t have to get referrals to see specialists. However, PPOs have much higher premiums than HMOs, so you pay more for that flexibility.

Find out the differences between HMOs, PPOs and other types of health plans.

Are your providers in network?

Check the health plan's network to make sure it has a good selection of hospitals, doctors and specialists. Look for your providers in the plan’s network.

This is especially true if you get an HMO. HMOs have a restricted network and won’t pay for the care you receive outside of the network.

If you get a PPO, you’ll likely be able to get out-of-network care, but it can come at a higher price tag.

What does private health insurance cover?

Check to see if the prescription drugs you take are included in the plan's list of covered medications. Compare other benefits. Some plans may go above and beyond coverage mandated by law.

What are the insurance companies' reputations?

You’ll also want to check out the company’s consumer reviews and financial standing. You can review Insure.com’s Best Health Insurance Companies for customer satisfaction ratings and company A.M. Best Financial Strength Ratings.

Making a smart individual health insurance choice requires time and effort, but the homework you do now will pay off later when you and your family need care.

Frequently asked questions about individual health insurance

Can I buy health insurance on my own?

Yes, individual health insurance plans are available for people who don't have a health insurance plan through their employer. If they qualify for purchasing individual health insurance coverage, they can buy it on the open marketplace. Be sure to know your income limits and other requirements before you apply.

You may also be able to find an individual or family policy from another source such as an insurer that offers individual policies. As always, make sure you understand the terms of any offer before you sign up for anything.

Can you get private health insurance?

If you do not have an employer-sponsored plan and are not eligible for Medicare or Medicaid, you can purchase insurance policies directly from private companies or through the health insurance marketplace.

What two parties pay for your health insurance if you enroll in an employer-sponsored plan?

Employers are responsible for buying individual health insurance for their employees. They do the research, choose an insurer and determine your plan options. The costs of these plans are shared by both parties, you contribute to your monthly premiums, the amount is deducted from your monthly paycheck, and your employer also pays a portion of the premium

Can you buy health insurance for someone else?

You can buy health insurance for minor children or include them on your plan. You can pay premiums for anyone you like, but they have to apply for the coverage.

How to pay for health insurance on your own?

Marketplace subsidies can make health insurance premiums affordable for many people. If you aren’t eligible for subsidies a high deductible plan may be an option. You can contribute to a health savings account (HSA) if you have a high deductible plan, and use pre-tax money to pay for qualified medical expenses, including deductibles.

Is it cheaper to buy your own health insurance?

If you’re eligible for an employer-sponsored plan, you’re generally not eligible for ACA subsidies. A short-term plan may be less expensive, however, the benefits will be much more limited than your employer’s plan.

-- Les Masterson contributed to this report.

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